![]() ![]() This can create credit issues and become much more difficult to manage than the typical penalty process.īecause of this risk, we highly recommend taking the following steps to ensure an employer receives all IRS correspondence: If the employer doesn’t respond to any of the other IRS correspondence, the employer will get a levy notice. This gives the IRS the ability to seize the employer’s property to pay the tax debt, if necessary. That comes in the form of a Notice CP504J. If the employer doesn’t pay once it gets the bill, the IRS does have the ability to assess a levy. At that stage, HUB highly recommends engaging experienced outside counsel. ![]() If an employer wants to contest these letters, the employer will have to talk to a supervisor or go to the IRS Office of Appeals. The appeals process for these letters is more formal than the process for the Letter 226J, which usually just involves providing information. Of course, part of the reason these are not bills is that the employer can still appeal these determinations if it wants to. Even though some of the letters say how an employer can pay the penalty, if the employer owes something, the employer will get a separate CP220J once the penalty has been assessed. More information on that process is available from the IRS Taxpayer Advocate Service.Īs noted above, these IRS acknowledgment letters still aren’t bills. ![]() If an employer wants to contest an N letter, the employer will either need to file in Tax Court or Federal District Court. For the L and M letters, the letters describe how to contest. However, how the employer disagrees will depend on the letter. No response is required.Īs with the Letter 226-J, this is still not a bill (more on that below). If the employer owes anything, the employer can pay it. This letter says that the Office of Appeals has made its determination. This letter is for employers who contested the penalty through the IRS Office of Appeals. With this letter, the IRS is saying, “Yes, we got your documentation, but we disagree with everything you said and still think you owe us the original amount.” Again, the employer can pay or contest, just like with the 227-L. If the employer disagrees, the employer can request a conference with an IRS supervisor or go to the IRS Office of Appeals. The IRS acknowledgment letter tells the employer how to pay if it agrees with the revised calculation. This letter will contain the revised list of employees and other information on which the penalty is based. In this case, the employer still owes a ESRP, but it’s less than what was in the initial Letter 226J. The employer will get this letter if it contested parts of the penalty calculation, provided the IRS with the relevant documentation, and the IRS agreed. It says the employer argued that it didn’t owe a penalty and the IRS agrees! In that case, no further action is required. It basically tells the employer not to send anything else (except payment) and how to pay. The IRS sends this letter if an employer agreed with the IRS’s findings. Instead, these are the IRS acknowledgment letters (appropriately numbered 227) that are received after an employer has responded (or not responded) to the initial Letter 226J. These are not the letters employers initially receive (the Letter 226J) regarding a possible 2015 Employer Shared Responsibility Payment (“ESRP”). Recently, the IRS posted on its website examples of Affordable Care Act (“ACA”) employer mandate acknowledgment letters. ![]()
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